Correlation Between Intevac and Franklin Electric
Can any of the company-specific risk be diversified away by investing in both Intevac and Franklin Electric at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Intevac and Franklin Electric into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Intevac and Franklin Electric Co, you can compare the effects of market volatilities on Intevac and Franklin Electric and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Intevac with a short position of Franklin Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intevac and Franklin Electric.
Diversification Opportunities for Intevac and Franklin Electric
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Intevac and Franklin is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Intevac and Franklin Electric Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Electric and Intevac is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Intevac are associated (or correlated) with Franklin Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Electric has no effect on the direction of Intevac i.e., Intevac and Franklin Electric go up and down completely randomly.
Pair Corralation between Intevac and Franklin Electric
Given the investment horizon of 90 days Intevac is expected to under-perform the Franklin Electric. In addition to that, Intevac is 2.26 times more volatile than Franklin Electric Co. It trades about -0.16 of its total potential returns per unit of risk. Franklin Electric Co is currently generating about 0.2 per unit of volatility. If you would invest 9,871 in Franklin Electric Co on September 4, 2024 and sell it today you would earn a total of 965.00 from holding Franklin Electric Co or generate 9.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Intevac vs. Franklin Electric Co
Performance |
| Timeline |
| Intevac |
| Franklin Electric |
Intevac and Franklin Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intevac and Franklin Electric
The main advantage of trading using opposite Intevac and Franklin Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intevac position performs unexpectedly, Franklin Electric can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Franklin Electric will offset losses from the drop in Franklin Electric's long position.| Intevac vs. Innovative Solutions and | Intevac vs. Heidrick Struggles International | Intevac vs. ICF International | Intevac vs. PDF Solutions |
| Franklin Electric vs. Graco Inc | Franklin Electric vs. Ametek Inc | Franklin Electric vs. Flowserve | Franklin Electric vs. Donaldson |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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